A prominent cryptocurrency investor, who emerged two months ago with approximately $11 billion in Bitcoin, has initiated nearly $900 million in short positions against Bitcoin and Ether, indicating expectations of a market correction despite general optimism for October.
The whale returned to the trading scene on Thursday with a $360 million Bitcoin (BTC) transfer, capturing the attention of cryptocurrency investors, as reported by Cointelegraph.
On Friday, this whale established a $600 million 8x leveraged short position on Bitcoin and a leveraged short exceeding $300 million on Ether (ETH), according to blockchain data from Onchain Lens.
The substantial short positions illustrate the whale’s belief in an impending correction; however, this stance could be overturned if Bitcoin’s price rises above $133,760, their liquidation threshold.
The whale also took a $330 million 12-times leveraged short position on Ether, with a liquidation price set at $4,613. At the time of writing, the position indicated an unrealized profit of $2.6 million, according to blockchain data shared by Lookonchain on Friday.
The whale’s strategy may motivate other large investors to engage in similar bets regarding a decline in the leading cryptocurrencies.
In August, nine whale addresses collectively acquired $456 million worth of Ether, following the $11 billion Bitcoin whale’s rotation of $5 billion from Bitcoin into ETH.
Large-scale selling from previously inactive Bitcoin whales significantly constrained Bitcoin’s price movement in August, according to analyst and early Bitcoin adopter Willy Woo.
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Bitcoin correction driven by smaller cohorts, not whales
Bitcoin reached a new all-time high above $125,700 on Sunday, before pulling back to trade above $121,350 as of this writing, according to Cointelegraph data.
The majority of selling pressure originated from smaller investors rather than large holders, including 603 Bitcoin sold by shrimp addresses, 2,260 Bitcoin sold by crabs, and 3,860 BTC sold by fish addresses, according to blockchain insights platform CryptoQuant’s Thursday X post.
The shrimp category comprises retail investor addresses holding less than 1 Bitcoin. Crab addresses contain up to 10 Bitcoin, whereas fish addresses hold between 50 to 100 BTC.
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Most cryptocurrency traders are additionally preparing for a short-term downturn in the crypto market.
Over 52% of Bitcoin holders on all exchanges are currently short, indicating their expectation of Bitcoin’s price drop, while 47% remain long, based on blockchain data from CoinAnk.
Approximately 51% of Ether traders have also shorted the second-largest cryptocurrency, anticipating a decline.
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